Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 05, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | ARDM | |
Entity Registrant Name | ARADIGM CORP | |
Entity Central Index Key | 1,013,238 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 15,219,793 | |
Entity Small Business | true | |
Entity Emerging Growth | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 2,946 | $ 7,095 |
Receivables | 118 | 200 |
Other assets | 412 | 389 |
Total current assets | 3,476 | 7,684 |
Property and equipment, net | 190 | 289 |
Other assets | 92 | 92 |
Total assets | 3,758 | 8,065 |
Current liabilities: | ||
Accounts payable | 323 | 903 |
Accrued clinical and cost of other studies | 14 | 274 |
Accrued compensation | 761 | 1,643 |
Deferred revenue - related party, current | 415 | 1,900 |
Deferred revenue - other | 209 | 183 |
Other accrued liabilities | 1,099 | 563 |
Total current liabilities | 2,821 | 5,466 |
Deferred rent | 57 | 32 |
Deferred revenue - related party, non-current | 33 | 90 |
Debt - non-current, net of discount | 1,003 | |
Debt - related party, non-current, net of discount | 5,905 | |
Convertible debt - non-current, net of discount | 2,615 | 2,382 |
Convertible debt - related party, non-current, net of discount | 14,786 | 12,626 |
Total liabilities | 27,220 | 20,596 |
Commitments and contingencies | ||
Shareholders' deficit: | ||
Preferred stock, 5,000,000 shares authorized, none outstanding | ||
Common stock, no par value; authorized shares: 50,045,765 at September 30, 2018; 35,045,765 at December 31, 2017; issued and outstanding shares: 15,219,793 at September 30, 2018; 15,170,200 at December 31, 2017 | 443,948 | 442,639 |
Accumulated deficit | (467,410) | (455,170) |
Total shareholders' deficit | (23,462) | (12,531) |
Total liabilities and shareholders' deficit | $ 3,758 | $ 8,065 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | ||
Common stock, shares authorized | 50,045,765 | 35,045,765 |
Common stock, shares issued | 15,219,793 | 15,170,200 |
Common stock, shares outstanding | 15,219,793 | 15,170,200 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue: | ||||
Total revenue | $ 282 | $ 2,728 | $ 2,011 | $ 12,096 |
Operating expenses: | ||||
Research and development | 1,545 | 3,543 | 6,715 | 10,111 |
General and administrative | 1,246 | 2,133 | 4,348 | 5,722 |
Total operating expenses | 2,791 | 5,676 | 11,063 | 15,833 |
Loss from operations | (2,509) | (2,948) | (9,052) | (3,737) |
Interest income | 7 | 23 | 27 | 73 |
Interest expense | (1,130) | (970) | (3,172) | (2,882) |
Other income (expense) | (4) | 9 | (43) | 17 |
Net loss and comprehensive loss | $ (3,636) | $ (3,886) | $ (12,240) | $ (6,529) |
Basic and diluted net loss per common share | $ (0.24) | $ (0.26) | $ (0.81) | $ (0.44) |
Shares used in computing basic and diluted net loss per common share | 15,186 | 14,860 | 15,135 | 14,836 |
Contract Revenue Related Party [Member] | ||||
Revenue: | ||||
Total revenue | $ 170 | $ 2,709 | $ 1,581 | $ 11,804 |
Contract Revenue [Member] | ||||
Revenue: | ||||
Total revenue | 52 | 6 | 176 | 241 |
Grant Revenue [Member] | ||||
Revenue: | ||||
Total revenue | $ 60 | $ 13 | $ 254 | $ 51 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (12,240) | $ (6,529) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation and amortization | 100 | 85 |
Stock-based compensation expense | 1,214 | 1,899 |
Amortization of convertible debt discount | 1,399 | 1,318 |
Loss on extinguishment of convertible debt | 24 | |
Financing costs, debt restructuring | 77 | |
Changes in operating assets and liabilities: | ||
Receivables | 82 | (196) |
Prepaid and other current assets | (23) | 407 |
Other assets | (92) | |
Accounts payable | (691) | 269 |
Accrued compensation | (882) | 854 |
Deferred revenue - related party | (1,542) | (6,647) |
Deferred revenue - other | 26 | |
Other accrued liabilities | 1,320 | (2,336) |
Deferred Rent | 25 | 21 |
Net cash used in operating activities | (11,111) | (10,947) |
Cash flows from investing activities: | ||
Transfer to/from restricted cash | 1,006 | |
Capital expenditures | (1) | (112) |
Net cash (used in) provided by investing activities | (1) | 894 |
Cash flows from financing activities: | ||
Proceeds from issuance of note payable | 7,000 | |
Proceeds from issuance of common stock | 95 | 56 |
Payment of convertible debt | (50) | |
Payments for financing costs | (82) | |
Net cash provided by financing activities | 6,963 | 56 |
Net decrease in cash and cash equivalents | (4,149) | (9,997) |
Cash and cash equivalents at beginning of period | 7,095 | 22,591 |
Cash and cash equivalents at end of period | 2,946 | 12,594 |
Supplemental disclosure of non-cash activities: | ||
Accrued interest capitalization | $ 1,044 | |
Cumulative effect of adoption of new accounting standards | 6,046 | |
Stock issued in payment of officer bonus | $ 444 |
Organization, Basis of Presenta
Organization, Basis of Presentation and Liquidity | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Basis of Presentation and Liquidity | 1. Organization, Basis of Presentation and Liquidity Organization Aradigm Corporation (the “Company,” “we,” “our,” or “us”) is a California corporation, incorporated in 1991, focused on the development and commercialization of drugs delivered by inhalation for the treatment and prevention of severe respiratory diseases. The Company’s principal activities to date have included conducting research and development and developing collaborations. Management does not anticipate receiving revenues from the sale of any of its products during the upcoming year. The Company operates as a single operating segment. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q S-X. 10-K 10-K”). The consolidated balance sheet at December 31, 2017 included above has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and notes thereto included in the 2017 Annual Report on Form 10-K. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. Liquidity and Financial Condition As reflected in the accompanying condensed consolidated financial statements, the Company has incurred significant recurring operating losses and negative cash flows from its operations and, as of September 30, 2018, had an accumulated deficit of $467.4 million, a total shareholders’ deficit of $23.5 million and working capital of $0.7 million. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management expects operating losses to continue for the foreseeable future including the year ending December 31, 2018. As of September 30, 2018, the Company’s current assets of $3.5 million are more than current liabilities of $2.8 million by approximately $0.7 million. In February 2018, the Board of Directors (the “Board”) implemented temporary measures intended to preserve the Company’s cash resources until additional sources of capital can be secured, including the reduction of cash compensation and severance benefits for certain officers and the reduction of cash compensation for members of the Board. On April 13, 2018, the Company entered into a note purchase agreement whereby entities affiliated with Grifols and First Eagle, the Company’s two largest shareholders beneficially owning collectively approximately 75% of the Company’s common stock as of September 30, 2018 and owning all of the Convertible Notes and Warrants described in Note 6 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, After quarter end, the Company received an additional $2 million on October 25, 2018, from Grifols under the additional note purchase agreement described in Note 13. Subject to the satisfaction or waiver of the applicable closing conditions, the Company currently anticipates the final closing under the October 2018 note purchase agreement for the payment of an additional approximately $2 million to occur before December 31, 2018. The company’s management currently estimates that at September 30, 2018, the additional funds received under the first closing of this financing under the October 2018 note purchase agreement of $2 million along with the Company’s cash balance of approximately $2.9 million will be sufficient to fund the Company’s operations at least through December 31, 2018. However, because of the expected losses and negative cash flows from operations, the Company will continue to require additional capital through the issuance of debt or equity securities, royalty financing transactions, strategic transactions or otherwise to fund the Company’s operations and continue the development of the Company’s lead product candidate Linhaliq. No assurance can be given that the Company will be successful in raising such additional capital on favorable terms or at all. Not achieving such funding on a timely basis would materially harm its business, financial condition and results of operations and could require the Company to delay or reduce the scope of all or a portion of its development programs, dispose of its assets or technology or to cease operations. Accordingly, the Company may not be able to continue as a going concern. For more information, see Note 11 (Going Concern) to the condensed consolidated financial statements presented in this report. See also Item 1A. – Risk Factors – “Our cash resources will only be sufficient to fund our operations through the fourth quarter of 2018. Additional funds may not be available on terms that are acceptable to us or at all.” Changing circumstances may cause the Company to expend cash significantly faster than it currently anticipates, and the Company may need to spend more cash than currently expected because of circumstances beyond its control. For these reasons, the Company is unable to estimate the actual funds it will require for development and any approved marketing and commercialization activities. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates include useful lives for property and equipment and related depreciation calculations, accruals for operating expenses, assumptions for valuing options and warrants, and income taxes. Actual results could differ from these estimates. Net Loss Per Common Share Basic net loss per common share is computed using the weighted-average number of shares of common stock outstanding during the period less the weighted-average number of restricted shares of common stock subject to repurchase. Diluted net income/(loss) per common share is based on the weighted average number of common and common equivalent shares, such as stock options and unvested restricted stock shares outstanding during the period. Potentially dilutive securities were excluded, because such inclusion of shares would have been anti-dilutive. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In July 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. 505-50. pre-adoption non-employee In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement Fair Value Measurement For additional information about the Company’s significant accounting policies, see Note 1 to the consolidated financial statements included in the 2017 Annual Report on Form 10-K |
Cash and Cash Equivalents
Cash and Cash Equivalents | 9 Months Ended |
Sep. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | 3. Cash and Cash Equivalents At September 30, 2018 and December 31, 2017, the Company’s cash and cash equivalents approximated their fair values. The Company currently invests its cash and cash equivalents in money market funds. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements The Company follows ASC 820, Fair Value Measurements The Company’s cash and cash equivalents at September 30, 2018 consist of cash and money market funds. Money market funds are valued using quoted market prices. |
Other Accrued Liabilities
Other Accrued Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities | 5. Other Accrued Liabilities At September 30, 2018, other accrued liabilities consist of accrued expenses for interest of $1,071,000, expenses for services of $20,000 and payroll withholding liabilities of $8,000. The liability for accrued interest of $1,071,000 is related to the Convertible Notes as outlined in Note 6 and represents the interest on the Convertible Notes that is accrued but unpaid as of September 30, 2018. At December 31, 2017, other accrued liabilities consisted of accrued expenses for interest of $345,000, expenses for services of $132,000 and payroll withholding liabilities of $86,000. |
Debt and Warrants
Debt and Warrants | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Debt and Warrants | 6. Debt and Warrants As of September 30, 2018, the Company’s debt consists of the following: Principal Unamortized Debt Balance (in thousands, except conversion rate and conversion price) Debt $ 1,055 $ (52 ) $ 1,003 Debt – related party 5,954 (49 ) 5,905 Convertible debt 3,135 (520 ) 2,615 Convertible debt – related party 20,850 (6,064 ) 14,786 Total $ 30,994 $ (6,685 ) $ 24,309 For the three and nine months ended September 30, 2018, the Company’s interest expense consists of the following: Three Months ended September 30, Nine Months ended September 30, 2018 2017 2018 2017 (in thousands) Coupon interest expense $ 665 $ 517 $ 1,770 $ 1,557 Noncash interest expense Amortization of debt discount 397 393 1,202 1,143 Amortization of transaction costs 68 60 197 174 Miscellaneous interest expense — — 3 8 $ 1,130 $ 970 $ 3,172 $ 2,882 2018 Promissory Notes On April 13, 2018, the Company entered into a promissory note purchase agreement whereby entities affiliated with Grifols and First Eagle, the Company’s two largest shareholders, beneficially owning, collectively, approximately 75% of the Company’s common stock as of September 30, 2018 and owning all of the Convertible Notes and Warrants described below, agreed to purchase up to approximately $7 million aggregate principal amount of 9% senior unsecured promissory notes due 2021 (the “Promissory Notes”). The Promissory Notes bear interest at a rate of 9% per annum payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2018 in the case of Promissory Notes issued on April 13, 2018 and on November 1, 2018 and in the case of Promissory Notes issued thereafter, unless earlier redeemed or cancelled in accordance with the terms of the Promissory Notes. Unless the Company elects otherwise, interest will be capitalized on the applicable interest payment date by adding such accrued interest to the principal balance of such Promissory Notes, at which time such interest will be deemed to have been paid. The Promissory Notes are redeemable by the Company for cash at any time for a redemption price of 100% plus accrued and unpaid interest and are subject to acceleration upon certain events of default. The Company completed the first closing under the note purchase agreement on April 13, 2018, at which time the Company issued and sold approximately $2 million aggregate principal amount of Promissory Notes. After the initial closing, the Company held five more closings monthly thereafter and received installment payments totaling an additional approximately $5 million by the period ended September 30, 2018. Financing costs of $116,252 incurred in connection with the issuance of the Promissory Notes were recorded as a debt discount and are being amortized using the effective interest rate method and recognized as non-cash interest 2016 Convertible Notes and Warrants On April 21, 2016, the Company entered into a securities purchase agreement to conduct a private offering, or the Convertible Note Financing, consisting of $23 million in aggregate principal amount of 9% senior convertible notes due 2021 convertible into shares of common stock, or the Convertible Notes, and 263,436 warrants to purchase shares of the Company’s common stock or the Warrants. The Convertible Notes bear interest at a rate of 9% per year, payable semiannually in arrears on November 1 and May 1 of each year commencing on November 1, 2016. The Convertible Notes mature on May 1, 2021, unless earlier redeemed or converted. The Convertible Notes are governed by the terms of the Indenture, between the Company and U.S. Bank National Association, as trustee, dated as of April 25, 2016, or the Indenture. The Convertible Notes are senior unsecured and unsubordinated obligations; rank equal in right of payment to the Company’s existing and future unsecured indebtedness that is not subordinated and are effectively subordinated in right of payment to the Company’s existing and future secured indebtedness. On or after December 1, 2017, the Company may redeem for cash all or a portion of the Convertible Notes if the last reported sale price of the Company’s common stock is at any time equal to or greater than 200% of the conversion price then in effect for at least twenty trading days immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The Indenture provides for customary events of default which may result in the acceleration of the maturity of the Notes, including, but not limited to, cross acceleration to certain other indebtedness of the Company and its subsidiaries. In the case of an event of default arising from specified events of bankruptcy or insolvency or reorganization, all outstanding Convertible Notes will become due and payable immediately without further action or notice. If any other event of default under the Indenture occurs or is continuing, the trustee or holders of at least 25% in the aggregate principal amount of the then outstanding Convertible Notes may declare all the Convertible Notes to be due and payable immediately. The Warrants have a five-year term and are exercisable at $5.21 per share of common stock. The exercise price is subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events or upon any distributions of assets, including cash, stock or other property to the Company’s shareholders. On April 18, 2018, the Company entered into a Supplemental Indenture between the Company and U.S. Bank National Association, as trustee, or the Supplemental Indenture, which amended the Indenture by, among other things, (i) the addition of provisions permitting the Company to make payments of interest on the Convertible Notes by increasing the outstanding principal amount of the Convertible Notes in the amount of the accrued interest being so paid and (ii) the removal of the Convertible Note holders’ option to require the Company to repurchase the Notes upon the occurrence of certain events, any of which constituted a “Fundamental Change” as defined in the Indenture. The Company considered the modification of the Convertible Notes to be a troubled debt restructuring under the guidance of ASC 470-60 Troubled Debt Restructurings by Debtors On April 25, 2016, the initial closing of the Convertible Notes took place under which the Company raised $20 million from a total of two investors and issued 4,319 Warrants to one investor. Of the $20 million, $19.9 million was financed by Grifols, a related party to the Company, as described in Note 8 below. The fair value of the warrants issued in the first closing was $11,000 and was recorded as a component of equity and discount to the debt host. There were 3,319,820 common shares underlying the conversion feature that was bifurcated as a derivative liability due to the Conversion Share Cap. The effective interest rate of the liability component was equal to 20.62% for the nine months ended September 30, 2018. On July 14, 2016, the second and final closing of the Convertible Notes took place under which the Company raised $3 million from a total of two investors and issued 259,117 Warrants. The fair value of the warrants issued in the second closing was $662,000 and was recorded as a component of equity and discount to the debt host. The effective interest rate of the liability component was equal to 15.15% for the nine months ended September 30, 2018. Because of the modification of the Convertible Notes, one investor elected not to participate in the refinancing and the Company prepaid a Convertible Note with a principal balance of $50,000. The extinguishment resulted in the Company recording a loss on extinguishment of $24,932 during the nine months ended September 30, 2018 which is included in Other income (expense) in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The financing costs of $2.4 million incurred in connection with the issuance of the Convertible Notes were allocated to the derivative liability, warrants and Convertible Note components based on their relative fair values. Financing costs of $1.4 million allocated to the Convertible Note host are being amortized using the effective interest rate method and recognized as non-cash interest As of September 30, 2018, the unamortized debt discount will be amortized over a remaining period of approximately 2.59 years. The if-converted For more information on the Company’s accounting for Convertible Notes and Warrants, see Note 7 to the consolidated financial statements included in the Company’s 2017 Annual Report on Form 10-K. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 7. Revenue Recognition For additional detail on the Company’s accounting policy regarding revenue recognition, see “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates.” The following table presents changes in the Company’s contract assets and liabilities for the nine months ended September 30, 2018. Balance at Additions Deductions Balance at (in thousands) Contract Assets $ 67 $ 254 $ (196 ) $ 125 Contract Liabilities: Deferred Revenue $ 2,173 $ 202 $ (1,718 ) $ 657 During the three months ended September 30, 2018 and 2017, the Company recognized the following revenues (in thousands). Three Months ended September 30, 2018 2017 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period: Performance obligations satisfied $ 168 $ 2,667 New activities in the period: Changes in the estimated transaction price allocated to performance obligations satisfied in prior periods – contract revenue 15 (21 ) Performance obligations satisfied from new activities in the current period – contract revenue 39 69 Changes in the estimated transaction price allocated to performance obligations satisfied in prior periods – grant revenue (97 ) — Performance obligations satisfied from new activities in the current period – grant revenue 157 13 Total revenue $ 282 $ 2,728 During the nine months ended September 30, 2018 and 2017, the Company recognized the following revenues (in thousands). Nine Months ended September 30, 2018 2017 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period: Performance obligations satisfied $ 1,663 $ 7,083 New activities in the period: Changes in the estimated transaction price allocated to performance obligations satisfied in prior periods – contract revenue 55 4,521 Performance obligations satisfied from new activities in the current period – contract revenue 39 441 Changes in the estimated transaction price allocated to performance obligations satisfied in prior periods – grant revenue (106 ) — Performance obligations satisfied from new activities in the current period – grant revenue 360 51 Total revenue $ 2,011 $ 12,096 |
Collaboration Agreement
Collaboration Agreement | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaboration Agreement | 8. Collaboration Agreement Grifols License and Collaboration Agreement See Note 9 to the audited consolidated financial statements included in the 2017 Annual Report on Form 10-K The Company’s performance obligations under the Grifols Collaboration include those related to the worldwide license to commercialize products developed from the collaboration which was satisfied in 2013, development services for Phase 3 clinical trials that were completed as of December 31, 2016, regulatory submission services for the first indication that were complete as of September 30, 2017, regulatory approval services in the US for the first indication that were complete as of March 31, 2018, and regulatory approval services in the EU for the first indication which are in progress and forecasted to be complete by the third quarter of 2019. In addition, the Company identified that Grifols has an option that will create manufacturing obligations for the Company upon exercise by the customer. Further, these customer options for manufacturing services were evaluated and did not include a material right. The Company recognizes revenue from license rights when the customer can use and benefit from the license rights. The Company recognizes revenue from its services performance obligations over time using a cost-to-cost input Under the License and Collaboration Agreement with Grifols, the Company is eligible to receive up to $25.0 million in payments upon the achievement of regulatory filing and approval milestones. As of September 30, 2018, the Company has achieved two of the six milestones and has received $10.0 million in payments. Milestone payments related to regulatory submission and approval services are considered variable consideration and excluded from the transaction price for the period ended September 30, 2018 due to the constraint on variable consideration. The Company has deferred $448,000 of the transaction price in the Grifols’ arrangement that is allocated to one performance obligation that is partially unsatisfied as of September 30, 2018. This amount is expected to be recognized over time as services are performed through the third quarter of 2019. |
Stock-Based Compensation and St
Stock-Based Compensation and Stock Options and Awards | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation and Stock Options and Awards | 9. Stock-Based Compensation and Stock Options and Awards The following table shows the stock-based compensation expense included in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2018 and 2017 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Costs and expenses: Research and development $ 74 $ 368 $ 560 $ 1,001 General and administrative 184 368 654 898 Total stock-based compensation expense $ 258 $ 736 $ 1,214 $ 1,899 There was no capitalized stock-based employee compensation cost for the three and nine months ended September 30, 2018 and 2017. Since the Company did not record a tax provision during the quarters ended September 30, 2018 and 2017, there was no recognized tax benefit associated with stock-based compensation expense. During the three months ended March 31, 2018, the Company granted 730,000 performance-based options to the employees of the Company. These options were granted at-the-money, In March 2016, and June and December of 2017, and June of 2018, the Company granted to the Officers certain stock option bonus awards, that vested based upon meeting certain specified company-wide performance goals. These options and stock awards were granted at-the-money, Stock Option Plans: 2005 Equity Incentive Plan (the “2005 Plan”), and 2015 Equity Incentive Plan (the “2015 Plan”) On March 13, 2015 the Board adopted and, on May 14, 2015 the Company’s shareholders approved, the 2015 Plan. The 2015 Plan replaces the Company’s 2005 Plan, which expired in March 2015. The 2015 Plan is intended to promote the Company’s long-term success and increase shareholder value by attracting, motivating, and retaining non-employee Stock Option Activity The following is a summary of activity under the 2005 Plan and the 2015 Plan for the nine months ended September 30, 2018: Shares Available for Balance at January 1, 2018 1,645,124 Options granted (1,630,469 ) Options cancelled 1,787,778 Awards cancelled 463,500 Balance at September 30, 2018 2,265,933 Stock Options Options Outstanding Number of Shares Weighted Average Exercise Price Weighted Aggregate Outstanding at January 1, 2018 3,727,581 $ 4.72 Options granted 1,630,469 $ 1.25 Options exercised (3,500 ) $ 1.06 Options cancelled (1,787,778 ) $ 4.90 Outstanding at September 30, 2018 3,566,772 $ 3.04 8.28 $ 53,360 Exercisable at September 30, 2018 2,105,323 $ 3.53 7.60 $ 24,320 During the nine months ended September 30, 2018, 3,500 stock options were exercised. The total amount of unrecognized compensation cost related to non-vested A summary of the activity of the Company’s unvested restricted stock and performance bonus stock award activities for the nine months ending September 30, 2018 is presented below representing the maximum number of shares that could be earned or vested under the 2005 Plan and the 2015 Plan: Restricted Stock Awards Number of Shares Weighted Average Grant Date Fair Balance at January 1, 2018 613,538 $ 1.95 Restricted shares cancelled (463,500 ) $ 1.51 Restricted share awards vested (136,613 ) $ 3.10 Balance at September 30, 2018 13,425 $ 5.24 For restricted stock awards the Company recognizes compensation expense over the vesting period for the fair value of the stock award on the measurement date. As of September 30, 2018, there was approximately zero of total unrecognized compensation costs, net of forfeitures, related to non-vested |
Net Loss Per Common Share
Net Loss Per Common Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | 10. Net Loss Per Common Share The Company computes basic net loss per common share using the weighted-average number of shares of common stock outstanding during the period less the weighted-average number of shares of common stock subject to repurchase. The effects of including the incremental shares associated with options, warrants and unvested restricted stock are anti-dilutive, and are not included in the diluted weighted average number of shares of common stock outstanding for the nine months ending September 30, 2018 and 2017. The Company excluded the following securities from the calculation of diluted net loss per common share for the nine months ended September 30, 2018 and 2017, as their effect would be anti-dilutive (in thousands). Nine months ended September 30, 2018 2017 Common shares underlying convertible notes 4,604 4,415 Outstanding stock options 3,567 2,790 Common shares underlying warrants 263 263 Unvested restricted stock 13 227 Unvested restricted stock units 10 10 |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | 11. Going Concern As reflected in the accompanying condensed consolidated financial statements, the Company has incurred significant recurring operating losses and negative cash flows from its operations and, as of September 30, 2018, had an accumulated deficit of $467.4 million, a total shareholders’ deficit of $23.5 million and working capital of $0.7 million. These factors among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management expects operating losses to continue for the foreseeable future including the year ending December 31, 2018. As of September 30, 2018, the Company’s current assets of $3.5 million are more than current liabilities of $2.8 million by approximately $0.7 million. In February 2018, the Board implemented temporary measures intended to preserve the Company’s cash resources until additional sources of capital can be secured, including the reduction of cash compensation and severance benefits for certain officers and the reduction of cash compensation for members of the Board. On April 13, 2018, the Company entered into a note purchase agreement whereby entities affiliated with Grifols and First Eagle, the Company’s two largest shareholders, beneficially owning collectively approximately 75% of the Company’s common stock as of September 30, 2018 and owning all of the Convertible Notes and Warrants described in Note 6, agreed to purchase up to approximately $7 million aggregate principal amount of bridge notes, or the Promissory Notes. The Company completed the first closing under the note purchase agreement on April 13, 2018, at which time the Company issued and sold approximately $2 million aggregate principal amount of Promissory Notes to the lenders thereunder. After the initial closing, the Company held five more closings monthly thereafter and received installment payments totaling an additional approximately $5 million. After quarter end, the Company received an additional approximately $2 million on October 25, 2018, from Grifols under the note purchase agreement described in Note 13. Subject to the satisfaction or waiver of the applicable closing conditions, the Company currently anticipates the final closing under the October 2018 note purchase agreement for the payment of approximately $2 million to occur before December 31, 2018. The company’s management currently estimates that at September 30, 2018, the additional funds received under the first closing of this financing under the October 2018 note purchase agreement of $2 million along with the Company’s cash balance of approximately $2.9 million will be sufficient to fund the Company’s operations at least through December 31, 2018. However, because of the expected losses and negative cash flows from operations, the Company will continue to require additional capital through the issuance of debt or equity securities, royalty financing transactions, strategic transactions or otherwise, to fund the Company’s operations and continue the development of the Company’s lead product candidate Linhaliq. No assurance can be given that the Company will be successful in raising such additional capital on favorable terms or at all. Not achieving such funding on a timely basis would materially harm its business, financial condition and results of operations and could require the Company to delay or reduce the scope of all or a portion of its development programs, dispose of its assets or technology or to cease operations. See also Item 1A. – Risk Factors – “Our cash resources will only be sufficient to fund our operations through the fourth quarter of 2018. Additional funds may not be available on terms that are acceptable to us or at all.” Changing circumstances may cause the Company to expend cash significantly faster than it currently anticipates, and the Company may need to spend more cash than currently expected because of circumstances beyond its control. For these reasons, the Company is unable to estimate the actual funds it will require for development and any approved marketing and commercialization activities. Since cash and cash equivalents are insufficient to fund the Company’s operations for the ensuing twelve months from the filing of this report, there is substantial doubt about the Company’s ability to continue to operate as a going concern. While recoverability of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company, the condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Lease On April 1, 2017, the Company entered into an amendment of the current lease for a building containing offices, laboratory, and manufacturing facilities, through March 31, 2023. The lease calls for annual minimum rental payments that increase at the rate of 3.5% per annum throughout the lease term. In accordance with GAAP, the Company recognizes rent expense on a straight-line basis. The Company recorded deferred rent for the difference between the amounts paid and recorded as an expense. At September 30, 2018 and December 31, 2017, the Company had $57,000 and $32,000 in deferred rent. If the lease is not terminated early in accordance with its terms, the Company’s future minimum rental payments required under the operating lease as of September 30, 2018 are as follows: For the year ended September 30, (in thousands) 2019 $ 499 2020 516 2021 535 2022 553 2023 140 Total $ 2,243 For the nine months ended September 30, 2018, base rental expense was approximately $385,000. Legal Matters On May 1, 2017, the Company filed a post grant review, or a PGR, petition in the United States Patent and Trademark Office Patent Trial and Appeal Board, or PTAB, challenging the validity of all 26 claims of U.S. Patent No.9,402,845 or the ‘845 Patent, assigned to Insmed Incorporated, or Insmed. The ‘845 Patent issued on August 2, 2016, and is entitled “Lipid-based compositions of antiinfectives for treating pulmonary infections and methods of use thereof.” PGR is a proceeding that became available in September 2012 in accordance with the America Invents Act. In a PGR, a petitioner may request that PTAB reconsider the validity of issued patent claims. Any patent claim PTAB determines to be unpatentable is stricken from the challenged patent. In August 2017, Insmed filed a Preliminary Response. In November 2017, PTAB denied institution of post-grant review of the ‘845 Patent. The Company is currently assessing the PTAB’s decision. On January 11, 2018, a putative class action lawsuit, Kevin Kheder v. Aradigm Corporation, et al., 3:18-cv-00261, |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events On October 25, 2018, the Company entered into a senior note purchase agreement under which Grifols, the Company’s largest shareholder beneficially owning 48% of the Company’s common stock and owning most of the Notes – related party and Convertible Notes – related party described in Note 6, agreed to purchase approximately up to $4 million aggregate principal amount of the Company’s senior unsecured promissory notes due 2021. The Company completed the first closing under this note purchase agreement on October 25, 2018, at which time the Company issued and sold $2 million aggregate principal amount of notes to Grifols. Subject to the satisfaction or waiver of the conditions to the closing set forth in the purchase agreement, the Company anticipates the sale of the remaining approximately $2 million of the Notes to occur in one subsequent closing, which the Company currently anticipates to occur prior to December 31, 2018. The promissory notes bear interest at a rate of 9% per annum payable semiannually in arrears on May 1 and November 1 of each year, beginning on November 1, 2018 in the case of the promissory notes issued on October 25, 2018, and on May 1, 2019 in the case of promissory notes issued thereafter, unless earlier redeemed or cancelled in accordance with the terms of the promissory notes. Unless the Company elects otherwise, accrued interest payable on each outstanding promissory note will be capitalized on the applicable interest payment date by adding such accrued interest to the principal balance of such Promissory Notes, at which time such interest will be deemed to have been paid. The promissory notes are redeemable by the Company for cash at any time, in whole or in part, for a redemption price of 100% plus accrued and unpaid interest to, but excluding, the redemption date, and are subject to acceleration upon the occurrence of one or more specified events of default. |
Organization, Basis of Presen_2
Organization, Basis of Presentation and Liquidity (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Aradigm Corporation (the “Company,” “we,” “our,” or “us”) is a California corporation, incorporated in 1991, focused on the development and commercialization of drugs delivered by inhalation for the treatment and prevention of severe respiratory diseases. The Company’s principal activities to date have included conducting research and development and developing collaborations. Management does not anticipate receiving revenues from the sale of any of its products during the upcoming year. The Company operates as a single operating segment. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q S-X. 10-K 10-K”). The consolidated balance sheet at December 31, 2017 included above has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and notes thereto included in the 2017 Annual Report on Form 10-K. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. |
Liquidity and Financial Condition | Liquidity and Financial Condition As reflected in the accompanying condensed consolidated financial statements, the Company has incurred significant recurring operating losses and negative cash flows from its operations and, as of September 30, 2018, had an accumulated deficit of $467.4 million, a total shareholders’ deficit of $23.5 million and working capital of $0.7 million. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management expects operating losses to continue for the foreseeable future including the year ending December 31, 2018. As of September 30, 2018, the Company’s current assets of $3.5 million are more than current liabilities of $2.8 million by approximately $0.7 million. In February 2018, the Board of Directors (the “Board”) implemented temporary measures intended to preserve the Company’s cash resources until additional sources of capital can be secured, including the reduction of cash compensation and severance benefits for certain officers and the reduction of cash compensation for members of the Board. On April 13, 2018, the Company entered into a note purchase agreement whereby entities affiliated with Grifols and First Eagle, the Company’s two largest shareholders beneficially owning collectively approximately 75% of the Company’s common stock as of September 30, 2018 and owning all of the Convertible Notes and Warrants described in Note 6 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, After quarter end, the Company received an additional $2 million on October 25, 2018, from Grifols under the additional note purchase agreement described in Note 13. Subject to the satisfaction or waiver of the applicable closing conditions, the Company currently anticipates the final closing under the October 2018 note purchase agreement for the payment of an additional approximately $2 million to occur before December 31, 2018. The company’s management currently estimates that at September 30, 2018, the additional funds received under the first closing of this financing under the October 2018 note purchase agreement of $2 million along with the Company’s cash balance of approximately $2.9 million will be sufficient to fund the Company’s operations at least through December 31, 2018. However, because of the expected losses and negative cash flows from operations, the Company will continue to require additional capital through the issuance of debt or equity securities, royalty financing transactions, strategic transactions or otherwise to fund the Company’s operations and continue the development of the Company’s lead product candidate Linhaliq. No assurance can be given that the Company will be successful in raising such additional capital on favorable terms or at all. Not achieving such funding on a timely basis would materially harm its business, financial condition and results of operations and could require the Company to delay or reduce the scope of all or a portion of its development programs, dispose of its assets or technology or to cease operations. Accordingly, the Company may not be able to continue as a going concern. For more information, see Note 11 (Going Concern) to the condensed consolidated financial statements presented in this report. See also Item 1A. – Risk Factors – “Our cash resources will only be sufficient to fund our operations through the fourth quarter of 2018. Additional funds may not be available on terms that are acceptable to us or at all.” Changing circumstances may cause the Company to expend cash significantly faster than it currently anticipates, and the Company may need to spend more cash than currently expected because of circumstances beyond its control. For these reasons, the Company is unable to estimate the actual funds it will require for development and any approved marketing and commercialization activities. |
Use of Estimates | Use of Estimates The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates include useful lives for property and equipment and related depreciation calculations, accruals for operating expenses, assumptions for valuing options and warrants, and income taxes. Actual results could differ from these estimates. |
Net Loss Per Common Share | Net Loss Per Common Share Basic net loss per common share is computed using the weighted-average number of shares of common stock outstanding during the period less the weighted-average number of restricted shares of common stock subject to repurchase. Diluted net income/(loss) per common share is based on the weighted average number of common and common equivalent shares, such as stock options and unvested restricted stock shares outstanding during the period. Potentially dilutive securities were excluded, because such inclusion of shares would have been anti-dilutive. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In July 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. 505-50. pre-adoption non-employee In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement Fair Value Measurement For additional information about the Company’s significant accounting policies, see Note 1 to the consolidated financial statements included in the 2017 Annual Report on Form 10-K |
Debt and Warrants (Tables)
Debt and Warrants (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Summary of Debt | As of September 30, 2018, the Company’s debt consists of the following: Principal Unamortized Debt Balance (in thousands, except conversion rate and conversion price) Debt $ 1,055 $ (52 ) $ 1,003 Debt – related party 5,954 (49 ) 5,905 Convertible debt 3,135 (520 ) 2,615 Convertible debt – related party 20,850 (6,064 ) 14,786 Total $ 30,994 $ (6,685 ) $ 24,309 |
Summary of Interest Expense | For the three and nine months ended September 30, 2018, the Company’s interest expense consists of the following: Three Months ended September 30, Nine Months ended September 30, 2018 2017 2018 2017 (in thousands) Coupon interest expense $ 665 $ 517 $ 1,770 $ 1,557 Noncash interest expense Amortization of debt discount 397 393 1,202 1,143 Amortization of transaction costs 68 60 197 174 Miscellaneous interest expense — — 3 8 $ 1,130 $ 970 $ 3,172 $ 2,882 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Changes in Contract Assets and Liabilities | The following table presents changes in the Company’s contract assets and liabilities for the nine months ended September 30, 2018. Balance at Additions Deductions Balance at (in thousands) Contract Assets $ 67 $ 254 $ (196 ) $ 125 Contract Liabilities: Deferred Revenue $ 2,173 $ 202 $ (1,718 ) $ 657 |
Summary of Revenue Recognized | During the three months ended September 30, 2018 and 2017, the Company recognized the following revenues (in thousands). Three Months ended September 30, 2018 2017 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period: Performance obligations satisfied $ 168 $ 2,667 New activities in the period: Changes in the estimated transaction price allocated to performance obligations satisfied in prior periods – contract revenue 15 (21 ) Performance obligations satisfied from new activities in the current period – contract revenue 39 69 Changes in the estimated transaction price allocated to performance obligations satisfied in prior periods – grant revenue (97 ) — Performance obligations satisfied from new activities in the current period – grant revenue 157 13 Total revenue $ 282 $ 2,728 During the nine months ended September 30, 2018 and 2017, the Company recognized the following revenues (in thousands). Nine Months ended September 30, 2018 2017 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period: Performance obligations satisfied $ 1,663 $ 7,083 New activities in the period: Changes in the estimated transaction price allocated to performance obligations satisfied in prior periods – contract revenue 55 4,521 Performance obligations satisfied from new activities in the current period – contract revenue 39 441 Changes in the estimated transaction price allocated to performance obligations satisfied in prior periods – grant revenue (106 ) — Performance obligations satisfied from new activities in the current period – grant revenue 360 51 Total revenue $ 2,011 $ 12,096 |
Stock-Based Compensation and _2
Stock-Based Compensation and Stock Options and Awards (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-Based Compensation Expense | The following table shows the stock-based compensation expense included in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2018 and 2017 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Costs and expenses: Research and development $ 74 $ 368 $ 560 $ 1,001 General and administrative 184 368 654 898 Total stock-based compensation expense $ 258 $ 736 $ 1,214 $ 1,899 |
Schedule of Activity Under Stock Option Plan | The following is a summary of activity under the 2005 Plan and the 2015 Plan for the nine months ended September 30, 2018: Shares Available for Balance at January 1, 2018 1,645,124 Options granted (1,630,469 ) Options cancelled 1,787,778 Awards cancelled 463,500 Balance at September 30, 2018 2,265,933 Stock Options Options Outstanding Number of Shares Weighted Average Exercise Price Weighted Aggregate Outstanding at January 1, 2018 3,727,581 $ 4.72 Options granted 1,630,469 $ 1.25 Options exercised (3,500 ) $ 1.06 Options cancelled (1,787,778 ) $ 4.90 Outstanding at September 30, 2018 3,566,772 $ 3.04 8.28 $ 53,360 Exercisable at September 30, 2018 2,105,323 $ 3.53 7.60 $ 24,320 |
Schedule of Unvested Restricted Stock Award Activities | A summary of the activity of the Company’s unvested restricted stock and performance bonus stock award activities for the nine months ending September 30, 2018 is presented below representing the maximum number of shares that could be earned or vested under the 2005 Plan and the 2015 Plan: Restricted Stock Awards Number of Shares Weighted Average Grant Date Fair Balance at January 1, 2018 613,538 $ 1.95 Restricted shares cancelled (463,500 ) $ 1.51 Restricted share awards vested (136,613 ) $ 3.10 Balance at September 30, 2018 13,425 $ 5.24 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Securities Excluded from Calculation of Diluted Net Loss per Common Share | The Company excluded the following securities from the calculation of diluted net loss per common share for the nine months ended September 30, 2018 and 2017, as their effect would be anti-dilutive (in thousands). Nine months ended September 30, 2018 2017 Common shares underlying convertible notes 4,604 4,415 Outstanding stock options 3,567 2,790 Common shares underlying warrants 263 263 Unvested restricted stock 13 227 Unvested restricted stock units 10 10 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Rental Payments Required under the Operating Lease | If the lease is not terminated early in accordance with its terms, the Company’s future minimum rental payments required under the operating lease as of September 30, 2018 are as follows: For the year ended September 30, (in thousands) 2019 $ 499 2020 516 2021 535 2022 553 2023 140 Total $ 2,243 |
Organization, Basis of Presen_3
Organization, Basis of Presentation and Liquidity - Additional Information (Detail) | Oct. 25, 2018USD ($) | Apr. 13, 2018USD ($) | Sep. 30, 2018USD ($)Segment | Dec. 31, 2017USD ($) |
Income Tax Expense Benefit [Line Items] | ||||
Number of operating segment | Segment | 1 | |||
Accumulated deficit | $ (467,410,000) | $ (455,170,000) | ||
Working capital deficit | 700,000 | |||
Total shareholders' deficit | (23,462,000) | (12,531,000) | ||
Current assets | 3,476,000 | 7,684,000 | ||
Current liabilities | 2,821,000 | 5,466,000 | ||
Current assets are less than current liabilities | $ 700,000 | |||
Ownership percentage | 75.00% | |||
Cash and cash equivalents | $ 2,946,000 | $ 7,095,000 | ||
Grifols and First Eagle [Member] | ||||
Income Tax Expense Benefit [Line Items] | ||||
Ownership percentage | 75.00% | |||
Subsequent Event [Member] | ||||
Income Tax Expense Benefit [Line Items] | ||||
Ownership percentage | 48.00% | |||
Bridge Notes [Member] | Grifols and First Eagle [Member] | ||||
Income Tax Expense Benefit [Line Items] | ||||
Aggregate principal amount | $ 7,000,000 | |||
Promissory Note [Member] | ||||
Income Tax Expense Benefit [Line Items] | ||||
Proceed from promissory notes issued | $ 2,000,000 | $ 5,000,000 | ||
Promissory Note [Member] | Subsequent Event [Member] | ||||
Income Tax Expense Benefit [Line Items] | ||||
Proceed from promissory notes issued | $ 2,000,000 | |||
Remaining amount of notes | $ 2,000,000 |
Other Accrued Liabilities - Add
Other Accrued Liabilities - Additional Information (Detail) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Other Accrued Liabilities [Line Items] | ||
Accrued payroll withholding liabilities | $ 761,000 | $ 1,643,000 |
Other Accrued Liabilities [Member] | ||
Other Accrued Liabilities [Line Items] | ||
Accrued expenses for services | 20,000 | 132,000 |
Accrued payroll withholding liabilities | 8,000 | 86,000 |
Convertible Debt [Member] | Other Accrued Liabilities [Member] | ||
Other Accrued Liabilities [Line Items] | ||
Accrued expenses for interest | $ 1,071,000 | $ 345,000 |
Debt and Warrants - Summary of
Debt and Warrants - Summary of Debt (Detail) $ in Thousands | Sep. 30, 2018USD ($) |
Debt Instrument [Line Items] | |
Principal | $ 30,994 |
Unamortized Debt Discount | (6,685) |
Balance | 24,309 |
Convertible Debt [Member] | |
Debt Instrument [Line Items] | |
Principal | 3,135 |
Unamortized Debt Discount | (520) |
Balance | 2,615 |
Convertible Debt [Member] | Affiliated Entity [Member] | |
Debt Instrument [Line Items] | |
Principal | 20,850 |
Unamortized Debt Discount | (6,064) |
Balance | 14,786 |
Debt [Member] | |
Debt Instrument [Line Items] | |
Principal | 1,055 |
Unamortized Debt Discount | (52) |
Balance | 1,003 |
Debt [Member] | Affiliated Entity [Member] | |
Debt Instrument [Line Items] | |
Principal | 5,954 |
Unamortized Debt Discount | (49) |
Balance | $ 5,905 |
Debt and Warrants - Summary o_2
Debt and Warrants - Summary of Interest Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Interest Expense [Abstract] | ||||
Coupon interest expense | $ 665 | $ 517 | $ 1,770 | $ 1,557 |
Noncash interest expense | ||||
Amortization of debt discount | 397 | 393 | 1,202 | 1,143 |
Amortization of transaction costs | 68 | 60 | 197 | 174 |
Miscellaneous interest expense | 3 | 8 | ||
Interest expense | $ 1,130 | $ 970 | $ 3,172 | $ 2,882 |
Debt and Warrants - Additional
Debt and Warrants - Additional Information (Detail) | Apr. 13, 2018USD ($) | Dec. 01, 2017$ / shares | Jul. 14, 2016USD ($)Investorshares | Apr. 25, 2016USD ($)Investorshares | Apr. 21, 2016USD ($)shares | Sep. 30, 2018USD ($)$ / shares | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)Shareholder$ / sharesshares | Sep. 30, 2017USD ($) |
Debt Instrument [Line Items] | |||||||||
Number of shareholders holding major voting interest | Shareholder | 2 | ||||||||
Percentage of voting interests held by the two shareholders | 75.00% | 75.00% | |||||||
Amortization of financing costs and discounts | $ 1,399,000 | $ 1,318,000 | |||||||
Number of trading days for effectiveness preceding issuance of redemption notice | 20 days | ||||||||
Redeemable portion of notes equal to percentage of principal amount of notes | 100.00% | ||||||||
Loss on extinguishment of debt | (24,000) | ||||||||
Amortization of financing cost | $ 68,000 | $ 60,000 | 197,000 | $ 174,000 | |||||
Financing costs, debt restructuring | (77,000) | ||||||||
Minimum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Redeemable portion of notes equal to or greater than percentage of sale price of common stock | 200.00% | ||||||||
Class of Warrant Issued April 22, 2016 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Warrants term | 5 years | ||||||||
Warrants, exercise price | $ / shares | $ 5.21 | ||||||||
Senior Unsecured Promissory Notes Due 2021 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Amortization of financing costs and discounts | $ 116,252 | ||||||||
Unamortized debt discount remaining amortization period | 2 years 7 months 2 days | ||||||||
Accrued interest payable | 172,000 | $ 172,000 | |||||||
Initial Closing [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Amount funded by number of investors | Investor | 2 | ||||||||
Fair value of warrants issued | $ 11,000 | ||||||||
Initial Closing [Member] | Class of Warrant Issued April 22, 2016 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Amount funded by number of investors | Investor | 1 | ||||||||
Class of warrants or rights, issued | shares | 4,319 | ||||||||
Second and Final Closing [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Amount funded by number of investors | Investor | 2 | ||||||||
Second and Final Closing [Member] | Class of Warrant Issued April 22, 2016 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Class of warrants or rights, issued | shares | 259,117 | ||||||||
Fair value of the warrants issued | $ 662,000 | ||||||||
Convertible Debt [Member] | Senior Convertible Notes Due 2021 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | 50,000 | $ 50,000 | |||||||
Unamortized debt discount remaining amortization period | 2 years 7 months 2 days | ||||||||
Accrued interest payable | 899,000 | $ 899,000 | |||||||
Loss on extinguishment of debt | 24,932 | ||||||||
Financing cost | $ 2,400,000 | 2,400,000 | |||||||
Amortization of financing cost | 1,400,000 | ||||||||
Financing costs, debt restructuring | $ 76,612 | ||||||||
Effective conversion rate | shares | 191.9386 | ||||||||
Debt conversion, initial conversion ratio, denominator | $ 1,000 | ||||||||
Conversion price per share of common stock | $ / shares | $ 5.21 | $ 5.21 | |||||||
Convertible Debt [Member] | Senior Convertible Notes Due 2021 [Member] | Minimum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage of principal amount of outstanding debt held by trustee or holders, in which they may declare debt to be due and payable immediately in event of default | 25.00% | ||||||||
Convertible Debt [Member] | Initial Closing [Member] | Senior Convertible Notes Due 2021 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from issuance of convertible debt | $ 20,000,000 | ||||||||
Number of common shares convertible to derivative liability due to Conversion Share Cap | shares | 3,319,820 | ||||||||
Effective interest rate on liability component | 20.62% | ||||||||
Convertible Debt [Member] | Initial Closing [Member] | Senior Convertible Notes Due 2021 [Member] | Grifols [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from related party convertible debt | $ 19,900,000 | ||||||||
Convertible Debt [Member] | Second and Final Closing [Member] | Senior Convertible Notes Due 2021 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from issuance of convertible debt | $ 3,000,000 | ||||||||
Effective interest rate on liability component | 15.15% | ||||||||
Private Placement [Member] | Class of Warrant Issued April 22, 2016 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of shares into which the class of warrant may be converted | shares | 263,436 | ||||||||
Private Placement [Member] | Senior Unsecured Promissory Notes Due 2021 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ 7,000,000 | ||||||||
Maturity date | Dec. 31, 2021 | ||||||||
Notes bear interest rate | 9.00% | ||||||||
Frequency of periodic payment of interest | Semiannually | ||||||||
Repayment terms | The Promissory Notes bear interest at a rate of 9% per annum payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2018 in the case of Promissory Notes issued on April 13, 2018 and on November 1, 2018 and in the case of Promissory Notes issued thereafter, unless earlier redeemed or cancelled in accordance with the terms of the Promissory Notes. | ||||||||
Redeemable portion of notes equal to percentage of principal amount of notes | 100.00% | ||||||||
Number of shareholders holding major voting interest | Shareholder | 2,000,000 | ||||||||
Percentage of voting interests held by the two shareholders | 75.00% | 75.00% | |||||||
Proceed from promissory notes issued | $ 2,000,000 | $ 5,000,000 | $ 5,000,000 | ||||||
Private Placement [Member] | Convertible Debt [Member] | Senior Convertible Notes Due 2021 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ 23,000,000 | ||||||||
Maturity date | May 1, 2021 | ||||||||
Notes bear interest rate | 9.00% | ||||||||
Frequency of periodic payment of interest | Payable semiannually in arrears on November 1 and May 1 of each year commencing on November 1, 2016. |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Changes in Contract Assets and Liabilities (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Contract Assets, beginning balance | $ 67 |
Contract assets, additions | 254 |
Contract assets, deductions | (196) |
Contract Assets, ending balance | 125 |
Contract liabilities: deferred revenue, beginning balance | 2,173 |
Contract liabilities: deferred revenue, additions | 202 |
Contract liabilities: deferred revenue, deductions | (1,718) |
Contract liabilities: deferred revenue, ending balance | $ 657 |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of Revenue Recognized (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue recognized in the period from: | ||||
Performance obligations satisfied | $ 168 | $ 2,667 | $ 1,663 | $ 7,083 |
New activities in the period: | ||||
Total revenue | 282 | 2,728 | 2,011 | 12,096 |
Contract Revenue [Member] | ||||
New activities in the period: | ||||
Changes in the estimated transaction price allocated to performance obligations satisfied in prior periods | 15 | (21) | 55 | 4,521 |
Performance obligations satisfied from new activities in the current period | 39 | 69 | 39 | 441 |
Grant Revenue [Member] | ||||
New activities in the period: | ||||
Changes in the estimated transaction price allocated to performance obligations satisfied in prior periods | (97) | (106) | ||
Performance obligations satisfied from new activities in the current period | $ 157 | $ 13 | $ 360 | $ 51 |
Collaboration Agreement - Grifo
Collaboration Agreement - Grifols License and Collaboration Agreement - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Milestone payments received | $ 10,000,000 |
Maximum [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Payments receivable upon the achievement of regulatory filing and approval milestones | $ 25,000,000 |
Grifols [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Minority interst percentage by other | 48.00% |
Unsatisfied performance obligations | $ 448,000 |
Stock-Based Compensation and _3
Stock-Based Compensation and Stock Options and Awards - Schedule of Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Costs and Expenses | ||||
Total stock-based compensation expense | $ 258 | $ 736 | $ 1,214 | $ 1,899 |
Research and Development [Member] | ||||
Costs and Expenses | ||||
Total stock-based compensation expense | 74 | 368 | 560 | 1,001 |
General and Administrative [Member] | ||||
Costs and Expenses | ||||
Total stock-based compensation expense | $ 184 | $ 368 | $ 654 | $ 898 |
Stock-Based Compensation and _4
Stock-Based Compensation and Stock Options and Awards - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Jun. 30, 2017 | Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Capitalized stock-based employee compensation cost | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Tax benefit associated with stock-based compensation expense | 0 | 0 | ||||||
Compensation expense | 258,000 | $ 736,000 | $ 1,214,000 | $ 1,899,000 | ||||
Stock Options [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Performance-based stock options, granted | 1,630,469 | |||||||
Performance-based stock options, cancelled | 1,787,778 | |||||||
Stock options exercised during the period | 3,500 | |||||||
Unrecognized compensation expense related to unvested stock options and stock purchases | 1,377,000 | $ 1,377,000 | ||||||
Weighted average period over which unrecognized compensation costs expected to be recognized | 1 year 5 months 4 days | |||||||
Unrecognized compensation expense | 73,000 | $ 73,000 | ||||||
Performance-Based Options [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Performance-based stock options, granted | 730,000 | |||||||
Compensation expense | $ 215,000 | |||||||
Performance-based stock options, vested | 290,000 | |||||||
Vesting period | 10 years | |||||||
Performance-based stock options, cancelled | 0 | |||||||
Performance-Based Options [Member] | Officers and Vice President [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Compensation expense | $ 53,000 | |||||||
Vesting period | 10 years | |||||||
Performance-based stock options, vested | 20,000 | |||||||
Performance-based stock options, cancelled | 1,500,000 | |||||||
Restricted Stock [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Unrecognized compensation expense | $ 0 | $ 0 | ||||||
2005 [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Plan expiration date | 2015-03 | |||||||
Two Thousand And Fifteen Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Increasing in shares of common stock authorized for issuance | 2,500,000 |
Stock-Based Compensation and _5
Stock-Based Compensation and Stock Options and Awards - Schedule of Activity Under Stock Option Plan - Shares Available for Future Grant (Detail) - Stock Options [Member] | 9 Months Ended |
Sep. 30, 2018shares | |
Shares Available for Future Grant | |
Balance at January 1, 2018 | 1,645,124 |
Options granted | (1,630,469) |
Options cancelled | 1,787,778 |
Awards cancelled | 463,500 |
Balance at September 30, 2018 | 2,265,933 |
Stock-Based Compensation and _6
Stock-Based Compensation and Stock Options and Awards - Schedule of Activity Under Stock Option Plan - Options Outstanding (Detail) - Stock Options [Member] | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Number of Shares | |
Outstanding at January 1, 2018 | shares | 3,727,581 |
Options granted | shares | 1,630,469 |
Options exercised | shares | (3,500) |
Options cancelled | shares | (1,787,778) |
Outstanding at September 30, 2018 | shares | 3,566,772 |
Ending exercisable | shares | 2,105,323 |
Weighted Average Exercise Price | |
Outstanding at January 1, 2018 | $ / shares | $ 4.72 |
Options granted | $ / shares | 1.25 |
Options exercised | $ / shares | 1.06 |
Options cancelled | $ / shares | 4.90 |
Outstanding at September 30, 2018 | $ / shares | 3.04 |
Ending exercisable | $ / shares | $ 3.53 |
Weighted Average Remaining Contractual Term | |
Outstanding at September 30, 2018 | 8 years 3 months 10 days |
Ending exercisable | 7 years 7 months 6 days |
Aggregate Intrinsic Value | |
Outstanding at September 30, 2018 | $ | $ 53,360 |
Ending exercisable | $ | $ 24,320 |
Stock-Based Compensation and _7
Stock-Based Compensation and Stock Options and Awards - Schedule of Unvested Restricted Stock Award Activities (Detail) - Restricted Stock [Member] | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Number of Shares | |
Balance at January 1, 2018 | shares | 613,538 |
Restricted shares cancelled | shares | (463,500) |
Restricted share awards vested | shares | (136,613) |
Balance at September 30, 2018 | shares | 13,425 |
Weighted Average Grant Date Fair Value | |
Balance at January 1, 2018 | $ / shares | $ 1.95 |
Weighted Average Grant Date Fair Value, canceled | $ / shares | 1.51 |
Weighted Average Grant Date Fair Value, vested | $ / shares | 3.10 |
Balance at September 30, 2018 | $ / shares | $ 5.24 |
Net Loss Per Common Share - Sch
Net Loss Per Common Share - Schedule of Securities Excluded from Calculation of Diluted Net Loss per Common Share (Detail) - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Common Shares Underlying Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities outstanding | 4,604 | 4,415 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities outstanding | 3,567 | 2,790 |
Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities outstanding | 13 | 227 |
Unvested Restricted Stock Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities outstanding | 10 | 10 |
Common Shares Underlying Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities outstanding | 263 | 263 |
Going Concern - Additional Info
Going Concern - Additional Information (Detail) | Oct. 25, 2018USD ($) | Apr. 13, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($)Shareholder | Dec. 31, 2017USD ($) |
Going Concern [Line Items] | |||||
Accumulated deficit | $ (467,410,000) | $ (467,410,000) | $ (455,170,000) | ||
Total shareholders' deficit | (23,462,000) | (23,462,000) | (12,531,000) | ||
Working capital deficit | 700,000 | 700,000 | |||
Current assets | 3,476,000 | 3,476,000 | 7,684,000 | ||
Current liabilities | $ 2,821,000 | 2,821,000 | 5,466,000 | ||
Current assets are less than current liabilities | $ 700,000 | ||||
Number of shareholders holding major voting interest | Shareholder | 2 | ||||
Percentage of voting interests held by the two shareholders | 75.00% | 75.00% | |||
Cash position | $ 2,946,000 | $ 2,946,000 | $ 7,095,000 | ||
Private Placement [Member] | Senior Unsecured Promissory Notes Due 2021 [Member] | |||||
Going Concern [Line Items] | |||||
Number of shareholders holding major voting interest | Shareholder | 2,000,000 | ||||
Percentage of voting interests held by the two shareholders | 75.00% | 75.00% | |||
Aggregate principal amount | $ 7,000,000 | ||||
Proceed from promissory notes issued | $ 2,000,000 | $ 5,000,000 | $ 5,000,000 | ||
Notes receivable | $ 2,000,000 | $ 2,000,000 | |||
Subsequent Event [Member] | |||||
Going Concern [Line Items] | |||||
Percentage of voting interests held by the two shareholders | 48.00% | ||||
Subsequent Event [Member] | Private Placement [Member] | Senior Unsecured Promissory Notes Due 2021 [Member] | |||||
Going Concern [Line Items] | |||||
Aggregate principal amount | $ 4,000,000 | ||||
Proceed from promissory notes issued | $ 2,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 11, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | |||
Percentage increase in annual minimum rental payments | 3.50% | ||
Deferred rent | $ 57 | $ 32 | |
Base rental expenses | $ 385 | ||
Lawsuit filing date | Jan. 11, 2018 | ||
Putative class action lawsuit | On January 11, 2018 a putative class action lawsuit, Kevin Kheder v. Aradigm Corporation, et al., No. 3:18-cv-00261, was filed in the United States District Court for the Northern District of California against the Company and two of its former officers. |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Rental Payments Required under the Operating Lease (Detail) $ in Thousands | Sep. 30, 2018USD ($) |
Operating Leases, Future Minimum Payments Due, Rolling Maturity [Abstract] | |
2,019 | $ 499 |
2,020 | 516 |
2,021 | 535 |
2,022 | 553 |
2,023 | 140 |
Total | $ 2,243 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) | Oct. 25, 2018 | Apr. 13, 2018 | Sep. 30, 2018 | Sep. 30, 2018 |
Subsequent Event [Line Items] | ||||
Percentage of voting interests held by the two shareholders | 75.00% | 75.00% | ||
Senior Unsecured Promissory Notes Due 2021 [Member] | Private Placement [Member] | ||||
Subsequent Event [Line Items] | ||||
Percentage of voting interests held by the two shareholders | 75.00% | 75.00% | ||
Aggregate principal amount | $ 7,000,000 | |||
Maturity date | Dec. 31, 2021 | |||
Proceed from promissory notes issued | $ 2,000,000 | $ 5,000,000 | $ 5,000,000 | |
Notes receivable | $ 2,000,000 | $ 2,000,000 | ||
Notes bear interest rate | 9.00% | |||
Redeemable portion of notes equal to percentage of principal amount of notes | 100.00% | |||
Frequency of periodic payment of interest | Semiannually | |||
Repayment terms | The Promissory Notes bear interest at a rate of 9% per annum payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2018 in the case of Promissory Notes issued on April 13, 2018 and on November 1, 2018 and in the case of Promissory Notes issued thereafter, unless earlier redeemed or cancelled in accordance with the terms of the Promissory Notes. | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Percentage of voting interests held by the two shareholders | 48.00% | |||
Subsequent Event [Member] | Senior Unsecured Promissory Notes Due 2021 [Member] | Private Placement [Member] | ||||
Subsequent Event [Line Items] | ||||
Aggregate principal amount | $ 4,000,000 | |||
Maturity date | Dec. 31, 2021 | |||
Proceed from promissory notes issued | $ 2,000,000 | |||
Notes bear interest rate | 9.00% | |||
Redeemable portion of notes equal to percentage of principal amount of notes | 100.00% |